Monthly Archives: July 2009

In May I attended a Yahoo Hack Day in London and wrote it up for the Reg. Although I found the business story unconvincing, I was impressed by the technology – things like BOSS, SearchMonkey, and especially YQL (Yahoo Query Language), which lets you treat the entire Internet as a structured database.

One thing all these services have in common is that they are search-related. If the Microsoft-Yahoo deal goes ahead, responsibility for Yahoo’s search engine moves to Microsoft. My high-level understanding is that Bing becomes the search engine, with some Yahoo engineers possibly moving to Microsoft, and others being let go.

There are big implications for Yahoo and the developers which depend on its services. Here’s the official statement quoted by Ashim Chhabra on the BOSS team:

This is the beginning of a process and we’ll be working with Microsoft to determine what makes the best sense for both us and developers. Regardless, we are certainly committed to continuing to innovate on the user experience of search all across Yahoo! and on continuing to engage with the developer community on several fronts, opening up leading audience experiences and data to third-party innovation. In that context, SearchMonkey can add a lot of value to how we help people get the most out of search and out of Yahoo!. Over the next several months we’ll determine what makes sense with our developer offerings and provide information when available.

though Chhabra adds:

Honestly the team is still absorbing the implications and we just don’t know. We can tell you that BOSS will remain live for the time being. There are many aspects still to be considered. Over the next several days we’ll be working hard to get clarity and will update the community as soon as we can.

A reasonable guess is that the APIs will continue to work – it is not usually that hard to map one set of APIs onto another – but that the focus of the development effort will change, and the actual results will be different when based on the new engine.

Do not take me wrong, have been using the Bing API since 2.0 and find it very similar to BOSS for integration purposes and results are good, but I guess my point is that Yahoo! Search Technology is pretty much dead from my understanding and hence the "real" BOSS is dead too.

There is another problem though, which is that the Yahoo culture, which draws on open source (Yahoo runs largely on PHP), is different from that of Microsoft. Some developers who use Yahoo APIs will likely feel uncomfortable with moving to Microsoft’s Live platform – prompting comments like this one:

Don’t use Bing please please please please please

Such folk may well find Google more congenial. Google’s search engine is far from open source, but the company supports a large amount of open source code (not least its web browser, Chrome/Chromium) and has been more successful than Microsoft in engaging with the open source community.

Although I suspect Yahoo gets little direct revenue from its developers, they are a dangerous group to disrupt, because of the influence they wield. If the Yahoo platform loses momentum, it is likely to impact its other initiatives as well.

Update:

For SearchMonkey and BOSS, we currently do not have anything concrete to tell you. Clearly, we’ll need to work with Microsoft to determine what makes the most sense for you and for us. For more details, please see Ashim Chhabra’s post to developers on the Yahoo! Search BOSS group. We’ve also received questions about the future of Yahoo!’s other developer offerings, such as YUI, YQL , and Pipes. We wanted to let you know that today’s news does not affect these products.

Microsoft’s search deal with Yahoo makes more sense than the attempted full acquisition last year. The 10-year deal provides for Microsoft’s Bing to become the back-end search engine for Yahoo, while Yahoo becomes the exclusive sales force for premium search advertisers on both Bing and Yahoo.

Maintaining a search engine is expensive. Yahoo has no appetite for it. So Yahoo saves some cash (in fact, makes some cash) while no longer having that cost burden.

On Microsoft’s side, it is convinced (probably rightly) that large scale is mandatory in order to compete with Google. As Ballmer put it:

the more searches you serve, the more you learn about what people search for and click on

When I was researching Bing, I was told that some of Bing’s features only work if there is sufficiently high usage. You cannot identify patterns of usage without a certain volume of data, which is easy to get for the most common searches, but not so much for those that are more specialist. The long tail applies – there are lots of niche searches.

The value of the data goes beyond search. Search and browsing patterns must enable some remarkable insights into human behaviour, which can inform product development.

A more humdrum fact is that advertisers like large audiences, and the combined search platform may appeal to some advertisers who would otherwise pass it by.

Microsoft is therefore relying on the combined value of the two companies’ search businesses being more than the sum of their individual values.

There is a risk though, which is that some users who like Yahoo’s current search engine may not like Bing so much. If they perceive Yahoo search as merely Microsoft search rebranded, they might jump ship, most likely to Google.

Still, you have to believe in your product. In theory, both companies could benefit from stronger search results and features.

It is important not to forget the context. Google is utterly dominant in search; this is two smaller players struggling to remain relevant in that market. I hope Yah-Bing succeeds because competition is good but the chances are that Google will sail on unperturbed.

I attended an online briefing about Morgan Stanley’s Matrix [warning: lots of Flash with sound effects], a tool for financial trading which has been written in Adobe Flex. Adobe’s Andrew Shorten has more information here, and notes:

Matrix was developed by Morgan Stanley with user experience consultation from Adobe Professional Services and technical delivery by Lab 49 in partnership with Adobe Professional Services and others.

Unfortunately I missed the first part of the briefing thanks to streaming issues (I wasn’t alone), but things settled down after 15 minutes or so. Hishaam Mufti-Bey, Matrix founder and global director at Morgan Stanley, spoke about the application and the technology it uses. He emphasized the value of zero-install:

The technology is out of the way, no-one has a problem with running the application. It’s now about how tight our prices are, how good our content is, which is always what we wanted to have happen … we want to deliver our franchise to the client without taxing their systems, or having to get past firewall issues, or install software and IT security will get in the way and it takes months to deploy.

I couldn’t agree more. The app itself looks great, though details of how it works were sketchy, I guess for commercial reasons. We were also told little about the server side of the application. Performance is said to be good, despite what is apparently 600,000 lines of code (I’m not 100% clear if this is all Flex code running on the client):

We’ve seen up to 40 currency players running on the screen and getting up to about 400 updates a second

claimed Mufti-Bey, though he added later than lack of multi-threading support is an issue. Next, he took a pop at Microsoft’s Silverlight:

Going out to clients and not installing software, that is a major show-stopper for Silverlight. If Silverlight turned around and offered that one day, that I didn’t need to install stuff on the client’s PC, then it would be a head-to-head. Flash is on 97.7% of the world’s browsers. That was a major consideration for us.

It’s an interesting point, though I’d have thought his comments need some qualification. Flash and Silverlight are both browser plug-ins, so the install issue is similar: if the plug-in is already installed, the app will just run in the browser, but if it is not installed in the right version, the user will need to install the plug-in first. According to riastats.com Flash is up to about 74.5% for version 10 and 20.5% for version 9; I’m not sure if Matrix requires version 10, but if it does then Mufti-Bey is exaggerating a little. Matrix currently uses Flash 9 (see comments). Silverlight by contrast is on 30% for version 2 and 1% for the just-released version 3.

Installing a browser plug-in is easy for most of us, but in a locked-down corporate environment may be problematic, and there is always some percentage of installs that will be troublesome. I’ve found installing Silverlight a smooth and quick process; but undoubtedly Flash is a de-facto standard whereas Silverlight is not. Microsoft can only address this by persuading more of us to develop Silverlight apps, and using it more in its own sites and products – like the forthcoming Office 2010 web applications, for example.

Still, the need to install the Silverlight plug-in where necessary is far less burdensome than either a classic Windows setup, or a requirement for the full .Net Framework; and Microsoft has also removed the requirement to run Windows itself by supporting Intel Mac. It sounds as if Microsoft is going in the right direction, even if catching Flash is a tough challenge.

That might not be enough, according to Mufti-Bey. Asked about the importance of designer-developer workflow, he remarked:

You have to look at the people that use that technology. The design community. That’s the biggest problem that Microsoft has. The designers all carry around Apple laptops, they all use the Photosuite [sic] set of software tools. It’s like asking structural engineers to stop using CAD applications. That’s the tool that they use, and if you can’t convince them to switch away from your software suite you are going to get a limited number of designers that will use Microsoft’s toolset … if you can’t get the designers to switch, to learn a new language, then how can you possibly ever get some traction?

Well, it wasn’t the answer to the question posed, but an interesting point nevertheless. Let’s presume that he is right, and nobody will switch from Photoshop. Is it so hard for Mac-wielding designers to work with .NET developers? There must be something in it, bearing in mind the effort Microsoft has made to improve Photoshop import in Expression Blend 3.0.

Overall I would like to have heard more about the process and challenges of developing a large Flex application, and less about why not to use Silverlight, interesting topic though it is.

Spotify lets you stream music from the company’s servers using a particularly fast and elegant user interface. The choice is huge, and of course shareable playlists are supported – I’ve had a lot of fun with these, using the desktop version.

Now here it comes for iPhone, with two big differences:

You can synch playlists to the device for playing offline – essential on a mobile device.

It’s not free; you have to be a premium user at £9.99 per month in the UK.

Although that is somewhat expensive, you get a lot for your money, including high quality 320kbs streaming on the desktop.

I noted a few further details from the comments to the above post:

An Android version is under development.

The iPhone app also works on the iPod Touch.

Offline works whether or not a connection is live. So if you pay for your data transfer, you could synch over wi-fi at home, then enjoy offline while travelling.

One thing that is not officially discussed is whether the company has verified with Apple that the application is acceptable. The post merely says:

… we’ve finally completed work on the Spotify app for the iPhone and sent it over to the nice people at Apple.

Now imagine you are Apple. The iPhone is in part built on the iPod, which was designed as a closed system using iTunes server and client to deliver music and apps to the device. Accepting an app that is an alternative to iTunes for music, and which to my mind represents the next generation of music delivery after downloading, is a threat to part of its business. It is not just that users might purchase less through iTunes. If users use Spotify rather than iTunes for their music, there are fewer barriers to moving from iPhone to Android or some other device (if Spotify chooses to support it). Reject the app then?

On the other hand, iPhone Spotify is for premium users only – not that many iPhone users will sign up. And if Apple rejects Spotify, there will be a very public cry of “monopoly” – whereas accepting it would be great PR.

Nintendo’s Wii Sports Resort with bundled MotionPlus accessory is just out, and I tried them out today. Sports Resort is the same concept as the original Wii Sports that is bundled with the console, with a mostly different selection of games and more advanced gameplay, while the MotionPlus accessory clips on to the Wii remote to make the motion sensing more accurate and sensitive.

I was interested in the game as the original Wii Sports was groundbreaking and for some time the best game on the Wii. While Microsoft and Sony beat themselves to a loss-making pulp by maxing out processing power and graphics performance, Nintendo introduced what was really the next generation of gaming, something that is closer to the real thing than using a conventional controller, and the company is now reaping the reward. Other factors are the high quality of the software, and that it targets the entire family rather than hard core gamers.

The MotionPlus is a hard sell, in that it seems on the surface to do essentially the same thing as the original controller, it is annoying to have to buy more than one if you want to go multiplayer, and it increases the price of the game (though your next MotionPlus game will not be so expensive). It also drains the battery a little faster.

In reality, MotionPlus is a significant advance, adding a gyro sensor to the existing accelerometer. This enables games to respond to rotational movement as well as movement in straight lines – see this interview and this video for more detail. Games like Swordplay and Table Tennis – both in Sports Resort – would not be possible without it.

In fact, Table Tennis was one of the first games I tried, and it was extraordinary. I held the controller, pretended it was a bat, played table tennis – and it worked, more or less. Admittedly the game is a bit more forgiving than the real thing (at least on the beginner levels), but it’s still remarkable; and I don’t have room for a real table in my house.

Sports Resort is a lot of fun. There are 12 games:

Swordplay

Wakeboarding

Frisbee

Archery

Basketball

Table Tennis

Golf

Bowling

Power Cruising

Canoeing

Cycling

Air Sports (Flying, Skydiving)

Of these, only bowling and golf repeat games in the original Wii Sports.

The games are pretty simple; the Wii is all about fun and accessibility. They are still challenging though, and have that “just one more try” quality that is characteristic of the best games. In cycling, for example, you pedal with your hands, but frenetic hand waving does not work since if your cyclist runs out of breath, he stops for a swig of water, losing you the race. If you want to do really well, you need to master steering, which is fairly tricky, in order to ride in the draft of cyclists ahead of you, as well as pacing the pedalling correctly.

Archery is in some ways a similar concept to golf – judge where to aim taking into account the wind and the arc of the arrow. There are also some secret targets.

Swordplay is a real workout. You can parry, stab and swing, and its difficult to avoid edging forward towards the TV screen – it would not surprise me if one or two accidents occur – but this is an involving and energetic game, and a highlight of Sports Resort.

I love the Table Tennis as I’ve already mentioned.

Basketball is disappointingly simple – a team game is much harder to execute successfully.

Bowling is great but a bit too close to the earlier version.

Overall the game displays Nintendo’s usual skill and attention to detail – recommended for indoor fun.

This followed extensive discussions with the Commission which centred on a remedy outlined in the January 2009 Statement of Objections (see MEMO/09/15) whereby consumers would be shown a "ballot screen" from which they could – if they wished – easily install competing web browsers, set one of those browsers as a default, and disable Internet Explorer. Under the proposal, Windows 7 would include Internet Explorer, but the proposal recognises the principle that consumers should be given a free and effective choice of web browser, and sets out a means – the ballot screen – by which Microsoft believes that can be achieved.

Under our new proposal, among other things, European consumers who buy a new Windows PC with Internet Explorer set as their default browser would be shown a ‘ballot screen’ from which they could, if they wished, easily install competing browsers from the Web. If this proposal is ultimately accepted, Microsoft will ship Windows in Europe with the full functionality available in the rest of the world. As requested by the Commission, we will be publishing our proposal in full here on our website as soon as possible.

The difference I’ve noticed between these two statements is that Microsoft talks about “a new Windows PC with Internet Explorer set as their default browser.”

Is Microsoft winning the right to continue making IE the default, in exchange for offering the user an easy way to switch browsers?

I guess we will discover when the full details appear.

It is not yet a done deal. The EU is only considering the proposal; and in the meantime customers will still get the browserless Windows E.

Another question: if the change is agreed, will the full Windows 7 be available in time for launch? Microsoft implies it may not:

We currently are providing PC manufacturers in Europe with E versions of Windows 7, which we believe are fully compliant with European law. PCs manufacturers building machines for the European market will continue to be required to ship E versions of Windows 7 until such time that the Commission fully reviews our proposals and determines whether they satisfy our obligations under European law. If the Commission approves this new proposal, Microsoft will begin work at that time to begin implementation of it with PC manufacturers.

My reflection: if the EU had done this twelve years ago, it might have changed the history of the Internet, probably for the better. Today, this manoeuvring is unnecessary.

Here’s a table which breaks down the results vs the same quarter last year, similar to one I made for the March figures. Numbers are in $millions:

Client

Revenue

% change

Profit

% change

Client (Windows)

3108

-28.7

2167

-33.32

Server and Tools

3510

-5.67

1349

-1.46

Online

731

–12.66

-732

-50.93

Business (Office)

4564

-13.33

2816

-16.17

Entertainment and devices

1189

-25.22

-130

-23.98

I am ignoring the hefty $1483 loss on “corporate-level activity” – though I noticed that despite announcing a projected reduction in headcount of up to 5000 by June 2010, headcount actually increased by 2% (around 1800) in the last 12 months.

Grim figures, though given the recession and that Microsoft still reported profits of $3987 for the quarter, not cataclysmic.

I expect Windows 7 will be a success and that the figures there will improve; further, if the global economy recovers (about which I am sceptical but ignorant) Microsoft’s results will no doubt reflect that. If Windows 7 does succeed, it will have spin-off benefits for other products.

Nevertheless, the company should be worried. Although we are not going to be abandoning our PCs and laptops any time soon, it doesn’t take much insight to predict that increasingly powerful internet-connected devices will tend to reduce the number of traditional computers we need, which will impact Office as well as Windows. On the server side, cloud computing will dampen demand for servers, particularly in the small business sector where Microsoft is particularly successful.

The challenge for Microsoft is to counter those trends by growing its online business, but that is not happening yet. Mobile is another potential growth area, but the figures for entertainment and devices show that Microsoft is not exploiting it successfully.

Further, if online does grow, that will damage the partner ecosystem which thrives on delivering and maintaining on-premise Windows and Office.

This could change; but only if that awkward third line in the table above undergoes dramatic transformation. Although there are signs of life, with promising technology like Azure and Silverlight, I am not yet convinced that Microsoft is even aware of its predicament, though with results like these it will be soon.

I’ve returned from a few days away to discover that Microsoft’s special Windows 7 offer, which was meant to run from July 15th 2009 until August 9th 2009, has already in effect expired. This was the deal for UK customers (already less generous that that offered in the USA):

You can pre-order Windows 7 Home Premium E for £49.99** or Windows 7 Professional E for £99.99**.

The double stars are merely a reference to the odd decision to supply Windows without a web browser in Europe – a strategy to counter the EU’s monopoly concerns.

However, if you go along to Amazon.co.uk, for example, you can order Windows 7 Home Premium for £69.98 or Professional for a distinctly un-special £159.99.

I clicked all the links on Microsoft’s offer page and could not find any retailer still offering Windows 7 at the special price.

If the offer was intended to achieve a flurry of pre-orders, I am sure it succeeded. If on the other hand it was a reward to beta testers, as claimed by Brandon LeBlanc:

A special thank you to our beta testers is needed for their time and effort in helping make Windows 7 a solid release. The special pre-order offer we did offering Windows 7 Home Premium and Windows 7 Professional at almost 50% discount was done with our beta testers in mind.

then I am puzzled. First, it was not restricted to beta testers; and second, if you were a beta tester who happened to be away at the wrong moment, then you missed out.

Will customers who are aware that they have missed the offer for arbitrary reasons now be happy to pay 50% more? From a marketing perspective, that is the interesting question. I suppose most users will not allow pique to influence their OS choices; but they will be understandably annoyed.

I am not sure what goals Microsoft had for Popfly – or whether the company itself knew them – but apparently they were not met; a week ago the team announced the closure of the service, with just one month’s notice:

Unfortunately, on August 24, 2009 the Popfly service will be discontinued and all sites, references, and resources will be taken down. At that time, your access to your Popfly account, including any games and mashups that you have created, will be discontinued.

If this is a sign of a new clarity of focus at Microsoft it may even be good news, but not for those who invested time and effort in creating Popfly content.

Popfly had several aspects. It was a tool for creating mash-ups, web applications that combine data from several Internet sources; it was a game creator; it was a cloud-based IDE; and it was a visual programming tool. It was the last that interested me most. True visual programming means that program logic as well as user interface is created visually. It has never really hit the mainstream, though it is an idea that will not go away. A recent example is found in Expression Blend 3, another Microsoft product, which allow designers to add simple logic to Silverlight or Windows Presentation Foundation applications without writing code.

One day, most programming may be done this way; but not with Popfly, despite its potential and promise.

The other reflection on this modern form of software abandonment is how it highlights a risk inherent in cloud computing: what happens when your platform is removed. Software abandonment is nothing new, and most of us will recall a favourite word processor, mind mapping tool, database manager or some other utility which was chopped. In the old world though, you could still use the software, at least until an operating system upgrade came along and rendered it useless. Even that can often be overcome, thanks to virtualisation.

Not so with cloud computing. When the Popfly service closes, you simply lose access to all your work – though informally the team has stepped in with a downloader, so all is not lost.

Technically the same thing could happen to Google Apps, Salesforce.com, Windows Azure, Amazon web services and the rest, though the chance of these large concerns with millions of users (Azure aside) closing suddenly is tiny. The death of Popfly is nevertheless a warning: if your cloud computing service is either delivered by a small concern, or is of small concern to a large concern, the risks of data and service loss are very real.

I attended a briefing on Microsoft Azure, its cloud platform. We were given details on Azure pricing and availability, along with brief presentations from organizations intending or hoping to make use of it. The press release is here.

Microsoft is promising commercial availability in Q4 2009, possibly at PDC 2009, scheduled for Nov 17-19. This will be English only, and will cover 21 countries including the US, UK, Ireland, Canada, India, Japan, Australia and New Zealand. In March 2010 availability will be extended to over 30 countries, though Azure itself will still be English language only.

SQL Azure: Web edition with 1GB database for $9.99 per month, or Business Edition with 10GB database for $99.99 per month.

.NET Services: $0.15 per 100K message operations.

Data transfer: $0.10 per GB inbound and $0.15 per GB outbound.

It is hard to compare directly; but my initial reaction is that Microsoft is somewhat more expensive than Amazon Web Services. SQL Server looks especially pricey; and I wonder if Microsoft is conscious of all its partners selling SQL Server as part of a hosting offering and not wanting to undercut them. Another legacy problem.

Microsoft has also announced SLAs for the new service, promising 99.9% uptime for Azure services with a 10% credit in the event of failure (that’s my summary of a slightly more complex guarantee). This is useful as a statement of intent, but not particularly valuable from a business perspective. The cost of downtime can be huge, and a 10% service credit does not begin to compensate.

I found the case studies interesting, even though they were generally expressions of intent rather than absolutely firm plans. Perhaps the most compelling was EasyJet, who told us that airport systems are generally antiquated and inefficient, and plans to bypass them as far as possible using an Azure-based alternative. If I can find time I’ll write this up in more detail.

Judging by these case studies, Azure is appealing to Microsoft-platform customers who enjoy being able to take their existing or new ASP.NET applications and migrate them to Azure with relatively few changes. Without the abandonment of SQL Data Services in favour of full SQL Server this would not have been possible.

Is Microsoft serious about Azure? I’m beginning to think that it is, though the marketing has been muted, and I am sure the company is aware of the tensions inherent in selling server licenses for on-premise use on the one hand, and services which make them unnecessary on the other. I doubt whether Microsoft would be in this space at all, if it did not fear the likes of Google App Engine eating away at its business.